Following suit with the rest of the world, a large majority of manufacturers are turning to robotic automation to increase production volume, improve quality, and lower costs. Those that haven’t yet leaped into the world of robotic automation might be concerned with the cost, especially after recovering from abrupt changes in the economy. We’ll review the costs to consider before taking advantage of this long-term investment.
What is the Value of Robotic Automation?
Implementing robotic automation is one of the smartest investments a manufacturing company can make, especially in this current economic landscape. Because customers want their products faster, better, and cheaper, manufacturers are tasked with finding a way to deliver fast while upholding the highest level of quality – and before their competitors can do it first.
Robotic automation allows a machine to do the job of a laborer for a fraction of the cost while operating 24 hours a day, seven days a week, during holidays, and without breaks. Moreover, robots can resolve different manufacturing needs and can be fully customizable.
Whether looking for spin welding systems, a pick-and-place machine, or metalworking systems, robotic automation can fit seamlessly into a manufacturing and production operation.
Robotic automation is industry agnostic. It can be especially lucrative for the medical and pharmaceutical industries, as the production rate for high-quality medical-grade products such as gloves and masks has skyrocketed since the COVID-19 pandemic.
Luckily, even industries with low production volumes and high product variability like the aerospace industry can see massive benefits with robotic automation. Take Boeing, for example, which implemented a panel assembly line that uses automation to drill holes and install fasteners in wings. This reduced scrap waste by 66%, allowed the wing to be produced 33% faster, and reduced the number of injuries by half (4).
Factors to Consider Before Purchasing
While there are several benefits to investing in automated solutions, and the future cost-savings might be clear, understanding the cumulative upfront costs is a necessity. To make this investment as profitable as possible, the following factors should be considered when budgeting and strategic planning:
1. Cost of Machines
One of the most common questions asked when considering whether to invest in robotic automation is, what the equipment’s upfront cost is. Leadership wants to know the hard cost of an automated machine. While it is only one pillar of the investment equation, it is usually the primary budgeting factor because it requires the most financial resources upfront.
Although the total cost can depend upon how many robots are needed and what they will be used for, the average cost for new equipment can range from $28,000 for a standalone robotic arm to hundreds of thousands of dollars and up for a complete industrial automation system.
While that’s only an approximation, it’s an important consideration when considering robotic automation. Fortunately, there are alternatives to help offset the initial cost, including purchasing used equipment, taking advantage of promotional discounts for multiple robots, and utilizing tax breaks.
2. Cost of Design and Build
Because the upfront cost is only one component of purchasing robotic automation equipment, it’s also critical to examine the cost of the designing and building aspects of the purchase. Note that the lead time to design and build a machine can take time, ranging anywhere from 20 to 55 weeks on average, depending upon the robot’s size and complexity.
3. Cost of Maintenance
Maintenance and auxiliary costs are the other pillars of the robotic automation equation. Maintenance is a cost all leadership and executives need to plan for.
When robots are properly maintained and serviced, their production life can be extended by many years before needing to be replaced. Using a preventative maintenance checklist or implementing a regular maintenance schedule can help prevent any significant issues that could shut equipment down or cut into profits.
Luckily, many robotic automation investors take advantage of savings compared to human laborers and soon notice that programming and maintenance costs are lower than training and maintaining operators.
4. Return on Investment
There is no doubt that the leap into robotic automation needs to be worthwhile. One of the most important questions to ask is “when can I see a return on investment?”. While some decision-makers may want to see an ROI within two years, it’s imperative to consider all the ways your automation equipment will work for you over the long haul.
Let’s say you purchase a medium-sized robot for material handling applications. Taking into account the energy and power needs, you can approximate the cost to operate per hour. When compared to the cost of manual labor, especially over the equipment’s lifetime, the difference is often staggering.
Most business leaders would agree that they would much rather invest in something that can operate for 75 cents an hour uninterrupted for the equipment’s lifetime than pay for a human laborer for dozens (if not a hundred) times that amount. Humans require breaks, vacation, and are prone to error and injury, too.
In addition to the labor savings, let’s take into account the production gains. For example, an SDC custom automated glass bottle loading cell can pick and place bottles into boxes at a rate of 300 parts per minute – no small feat for a laborer. Not only can this equipment do the job faster, but it can also do it without material waste.
With all considered, accurate calculation determines robotic automation cost. A simple way to calculate a specific ROI is to use an ROI calculator. Simply put, this is an equation that conjunctively considers several variables in your ROI calculation, including total system cost, utilization rate, current labor costs, and anticipated labor cost with the robotic system(s). That way, you can plug in your unique costs and proposed resource allocations to obtain a more realistic approximation.
At SDC, we know that robotic automation cost is top of mind for manufacturing leadership and executives – they want to know that robotic automation will be a lucrative and profitable venture for many years to come. Our team of experts knows how important it is to have efficient, robust, and reliable robotic equipment that can benefit your bottom line for years to come. No matter the industry or complexity, we can create custom automation solutions that fit your unique needs. Contact SDC today to see how we can help you improve manufacturing operations through robotic automation, and be sure to also check out some of our past projects.